Business update: McDonald's hit by lawsuits over worker pay

McDonald's workers in three states filed lawsuits against the fast-food chain this week, saying the company engages in a variety of illegal practices to avoid paying them what they're owed.

The Associated Press

NEW YORK — McDonald's workers in three states filed lawsuits against the fast-food chain this week, saying the company engages in a variety of illegal practices to avoid paying them what they're owed.

The suits in California, Michigan and New York come amid growing attention on the country's wealth disparities. While the type of violations outlined in the suits aren't specific to McDonald's, lawyers said they targeted the company because it's an industry leader.

Taken together, the suits seeking class action status could affect roughly 30,000 workers, lawyers said during a conference call arranged by organizers of the recent fast-food protests. They seek back pay and other damages.

The announcement of the suits came on the same day that President Obama directed the Labor Department to devise rules that would expand the number of workers eligible for overtime pay. The White House, Democratic lawmakers and labor organizers have also been pushing to raise the federal minimum wage to $10.10 an hour, which translates to roughly $21,000 a year for full-time work. The current federal minimum wage is $7.25 an hour, or $15,000 a year.

McDonald's, based in Oak Brook, Ill., said in a statement that it is investigating the allegations and will take any necessary actions.

"McDonald's and our independent owner-operators share a concern and commitment to the well-being and fair treatment of all people who work in McDonald's restaurants," the company said.

The lawsuits detail a range of violations, including the use of company software that monitors the ratio of labor costs as a percentage of revenue. When that ratio climbs above a target, attorneys in Michigan said workers were forced to wait around before they could clock in. Workers in the state also were forced to pay for their own uniforms, which lawyers said reduced their already low wages.

In California, the violations cited included altered pay records and the denial of rest breaks. In New York, lawyers said McDonald's failed to reimburse workers for the cleaning of their uniforms in violation of state law.

Jason Hughes, one of the McDonald's workers named in the suits, said during the conference call with reporters that he wouldn't be allowed to take breaks when the California store he worked in was understaffed.

"I thought a well-known company like McDonald's would treat me fairly," he said in his prepared statement, noting that he wouldn't answer questions from reporters on the advice of his lawyer.

The lawsuits target both franchise- and company-owned restaurants. McDonald's Corp. is named in all the suits, along with franchisees in some, because lawyers say the company exerts control over staffing at all its locations.

"There are a number of ways the two seem to work together," said Joseph Sellers, one of the attorneys representing workers.

The vast majority of the more than 14,000 McDonald's restaurants in the U.S. are owned by franchisees.

The workers named in the suits were referred to attorneys by the organizers of the recent fast-food protests that called for pay of $15 an hour. The Service Employees International Union has been providing financial and organizational support to that campaign, which has gained national media attention over the past year or so.